Air Canada calls for government intervention should pilot contract talks fail

Open this photo in gallery:

Air Canada has called for federal government intervention should contract talks with its unionized pilots fail and ground the country’s largest airline, which would upend the travel plans of hundreds of thousands of its customers and disrupt the economy.

The airline and the Air Line Pilots Association (ALPA) have been in negotiations for more than a year, and both sides will be in legal strike or lockout positions on Wednesday, Sept. 18, after giving 72 hours notice.

In a report released Thursday, Desjardins Group estimated that a two-week shutdown could cause a loss in real GDP of about $1.4-billion. An impasse could also halt air-cargo shipments such as medical supplies and high-value goods.

Air Canada said Thursday that talks have stalled and that the union has rejected what the company said were offers of unprecedented wage increases. The airline issued a press release on Thursday urging the government to order the dispute be settled by an arbitrator, an independent panel that imposes a contract, should the negotiations fail.

“With talks nearing an impasse and time for negotiation running out, the travel plans of hundreds of thousands of Canadians are hanging in the balance,” said Michael Rousseau, chief executive of Air Canada, in a statement.

“While we remain committed to reaching a negotiated settlement with ALPA, the federal government should be prepared to intervene if talks fail before any travel disruption starts.”

After Air Canada called for binding arbitration, the union leader representing 5,200 pilots issued a statement that said the company was weaponizing the Canadian economy to circumvent the union’s constitutional right to collective bargaining.

“Government interference in the bargaining process tips the scales in the favour of corporations, hindering workers’ ability to achieve a collective agreement that reflects the work they do – work that provides economic output and benefits to all Canadians,” said Charlene Hudy, head of the Air Canada members at the ALPA.

Earlier in the day, Ms. Hudy said that there had been progress at the bargaining table, with some disagreements remaining over issues such as scheduling and wages.

A shutdown would halt some 670 Air Canada and Air Canada Rouge flights a day, disrupting travel for many and severing international connections flown by foreign airlines. Air Canada has said it will begin cancelling flights on Sept. 13, and will gradually shut down ahead of the Sept. 18 deadline in preparation for a strike or lockout.

This summer, the federal government sent a labour dispute between WestJet Airlines and its mechanics for arbitration to the Canada Industrial Relations Board. However, the mechanics went on strike for two days anyway, before reaching a negotiated settlement.

The government last month ended stoppages at Canadian National Railway and Canadian Pacific Kansas City railway, with the CIRB ordering them and the union back to work and imposing binding arbitration. The Teamsters is appealing those moves, calling them unconstitutional.

In an interview at the union’s office near Toronto’s Pearson International Airport, Ms. Hudy said the pilots are seeking scheduling improvements that would allow them more days at home while earning more on the days they do work, as well as wages in line with those of their peers in Canada and the United States. She declined to provide more details of the union’s demands.

“In most cases, [pilots at U.S. airlines] are paid twice as much. And in some cases, that can be three times as much,” Ms. Hudy said. About 1,000 Air Canada pilots have second jobs, “to actually pay bills, put food on the table and pay off the debt they accumulated to become a pilot in the first place,” she said.

Air Canada pilot wages start at about $60,000 a year and rise according to seniority, plane flown and rank. Air Canada says captains – the most senior pilots – make between $215,000 and $352,000. Ms. Hudy disputes these numbers, saying most do not make close to this.

Air Canada said the two sides have tentatively agreed on 70 per cent of the issues on the table, including 30-per-cent raises over the life of the contract, better benefits and scheduling improvements.

Air Canada has offered a three-year deal, according to a source. The Globe and Mail is not identifying the individual because they are not authorized to speak publicly on the matter.

Open this photo in gallery:

Labour Minister Steven MacKinnon was in Toronto on Thursday evening to meet with both sides. “There’s no reason why these parties can’t work together and get a deal done,” he said on social-media site X.

“The best deal happens at the bargaining table,” Prime Minister Justin Trudeau told reporters in Vancouver.

Business groups have been urging Mr. MacKinnon to send the dispute to binding arbitration.

“Shutting down [Air Canada] is big news because of its dominant size,” said W. Steven Tufts, a professor at York University. “My feeling is that the government will intervene with any work stoppage involving the pilots, if not pre-emptively, then after a day or two at most.”

Annick Guérard, CEO of Air Transat operator Transat AT, said granting Air Canada’s request for arbitration to settle a contract is unfair to other airlines, including the one she runs. Air Transat and its flight attendants this year ended three rounds of contract talks before the workers approved a deal that made them the best-paid cabin crews in the country.

“The extension of such an extraordinary intervention to Air Canada would be an undeniable competitive advantage, to the detriment of other Canadian airlines,” Ms. Guérard said on a conference call Thursday.

The Air Canada pilots are working under a 10-year-old agreement that provided raises of 2 per cent a year. Members last year ended the contract one year early and voted to fold the Air Canada Pilots Association and join ALPA, which represents 78,000 pilots at 41 airlines in Canada and the U.S.

Western University professor Geraint Harvey said joining the bigger union gave the pilots access to greater resources and data on conditions at U.S. airlines.

“This means that they are very well aware of the terms and conditions of service for U.S. pilots, which are significantly better than those of pilots in Canada,” Prof. Harvey said. “Of course, the U.S. has more than 330 million potential customers and Canada has around 41 million, [which] means that the market is very different.”

Union official Jesse Jantzi, who flies a Boeing 787 at Air Canada, said the contract’s provisions no longer reflect the planes, international routes and schedules that pilots operate with. Mr. Jantzi flies across the Atlantic Ocean about 10 times a month, which equals about 19 days of flying. His counterparts at U.S. airlines, meanwhile, fly a similar workload in 11 or 12 days a month for more money.

He added that pilots are regularly being stuck – unpaid – on layovers in hotels when they could be flying and making money.

“There’s a lot of fatigue management in this job,” Mr. Jantzi said. “The layovers are not a vacation, which I think a lot of people think they are. You spend a lot of time on a layover just simply trying to recover.”

Their wages have been surpassed by those paid at WestJet Airlines, Porter Airlines and the U.S. carriers, he said.

In 2023, ALPA-represented pilots at several airlines signed new collective agreements, winning double-digit raises amid a shortage of pilots as travel rebounded with the pandemic waning, including: WestJet – 24 per cent over four years; Delta Air Lines – 34 per cent over four years; and United Airlines – 35-to-40 per cent over four years.

With reports from Nicolas Van Praet